E-commerce becomes pillar of the Runet

The provided material is based on public data as well as private sources. The estimated total was made by Startup Afisha analysts.

SUMMARY

In autumn 2012 the Russian market of venture capital has shown the most significant growth since 2011, recovering from the preparatory spring and summer. E-commerce was the only notable growth driver - startups from this area began to attract multimillion-dollar investments, comparable in size with European ones (in many cases due to the fact that some of them have owners and co-investors in Western Europe), but still not reaching out to the U.S. level. Furthermore September demonstrated «farewell» growth of media projects – one can observe it in the context of the emergence of large international players and awaiting mergers and acquisitions alongside with continued dominance of social consumer Web on the Internet market of Russia.

DEAL OF THE MONTH

The largest investment deal in the history of Russian investment market took place in September. JP Morgan Asset Management, the investment division of JP Morgan Chase & Co, participated in the latest round of funding online retailer Lamoda.ru, operating in Russia and Kazakhstan (originally supported by German startup accelerator Rocket Internet). American investors have put into the project about $ 80 million, to become an owner of a minority stake in the company.

Owners of Lamoda.ru will direct attracted investment to increase the range and line of products, also they will expand the retailer's presence on emerging markets other than Russia: Kazakhstan, Ukraine, Azerbaijan and Belarus. Currently Lamoda sells clothing, shoes, accessories, household products, cosmetics and perfumes, offering items of 700 different international brands. The product assortment counts up to about 500 thousand items of clothing, shoes and accessories.

Financial indicators of the project are not disclosed, but in the course of one and a half year of work Lamoda attracted a monthly audience of 5 million unique visitors, 500,000 of whom are regular customers. The average purchase size is around 120 euros.

FUND OF THE MONTH

Russian venture fund Leta GIV was renamed into Leta Capital, and singled out into independent business unit of the holding company and changed its investment strategy. The basic principles will remain the same ‑ investment in start-ups come from the earnings of the managing company Leta Group (a major player on the Russian IT market, in particular, manages business of known antivirus developer ‑ ESET Russia), the projects in the field of information security are a priority, companies in portfolio may be unprofitable, but they have to be targeted towards international market. Typically the fund invests from $ 1 million for a share of about 25-33%, but the fund commits to provide to companies in its portfolio with more opportunities.

These new opportunities might be driven by attracting co-investors from Russia and the Western countries, but only if a startup itself will be interested in it. This way Leta Group distinguishes companies between those owned by Leta Group, and those from the venture investment portfolio and the latter ones enjoy a much greater degree of freedom. At the same time additional resources that Leta Group provides alongside with money will be available to portfolio companies of Leta Capital fund.

Currently, according to Startup Afisha intelligence, Leta Capital is in process of negotiations with the to-be-launched in Russia startup-accelerator, whose concept is based on the American «500 Startups» model.

STARTUP OF THE MONTH

In September 2012 on-line movie theater with legal videos ivi.ru raised $ 40 million from the Russian and international funds. The main investor is Baring Vostok, co-investors - ru-Net, Tiger Global, «ProfMedia» and Frontier Ventures. Management of ivi.ru plans to spend attracted investment for the development of its own technology and further acquisition of content.

Currently ivi.ru has a base of 10 million unique users (three-time increase in one year), which watch more than 50 million videos. Directory of the service consists of 65 thousand movies, TV shows, music videos and cartoons. Creators of the service and its management company Digital Access have ambitious plans to create a competitor for foreign startups Netflix and Hulu on basis of ivi.ru, which can buy this start-up in the case of entering the domestic market - this information is circulating in the industry for about a year and is heated by reconfiguration in the ivi.ru management team.

PERSON OF THE MONTH

In September 2012 co-founder of Mail.ru Gregory Finger finalized an expected deal of selling 12 million global depositary receipts (GDR) of the Internet company for $ 408 million. The deal was carried out in favor of a broad range of qualified investors; it was made with the use of the process of accelerating formation of book with the price of $34 per share, which means, voting shares were converted into ordinary. The volume of the sold shares of Mail.ru was 5.7%. After that, the total market value of Mail.ru fell 6.01% and now it is 6 billion UK pounds.

After that, Finger, and another co-founder of Mail.ru Group Michael Vinchel ( "Man of the Month" in July 2012) will join the advisory body of the venture fund which, according to the source of StartUp Afisha, is most likely ‑ BuranVC due to the known fact of the fund managers' close ties with management of Mail.ru and a number of soon-to-happen deals with portfolio companies of Buran VC.

MONTHLY VOLUME OF ANNOUNCED DEALS. DYNAMICS

In September 2012 co-founder of Mail.ru Gregory Finger finalized an expected deal of selling 12 million global depositary receipts (GDR) of the Internet company for $ 408 million. The deal was carried out in favor of a broad range of qualified investors; it was made with the use of the process of accelerating formation of book with the price of $34 per share, which means, voting shares were converted into ordinary. The volume of the sold shares of Mail.ru was 5.7%. After that, the total market value of Mail.ru fell 6.01% and now it is 6 billion UK pounds.

After that, Finger, and another co-founder of Mail.ru Group Michael Vinchel ( "Man of the Month" in July 2012) will join the advisory body of the venture fund which, according to the source of StartUp Afisha, is most likely ‑ BuranVC due to the known fact of the fund managers' close ties with management of Mail.ru and a number of soon-to-happen deals with portfolio companies of Buran VC.

MONTHLY NUMBER OF DEALS. DYNAMICS

In September 2012, the Russian venture capital market had 16 deals, that is 7 deals more (78% increase) than in August 2012.

MONTHLY NUMBER OF FUNDS' NEW COMMITMENTS. DYNAMICS

In September 2012, venture capital funds working on the Russian market, announced their readiness to invest a total of about $ 50 million in Russian projects by the end of 2012.

NUMBER OF ACTIVE FUNDS ON RUSSIAN MARKET

In September 2012, there were 105 venture capital funds on the Russian market (Managing Company, incubator, accelerator, investment company), which do venture investment; it is 3 funds more (up 3%) than in August 2012.

STARTUP BREAKDOWN BY TECHNOLOGY

In September 2012, the investments in start- ups distributed according to niches as follows: